Fed’s Jefferson says happy to keep Fed Funds on hold at current rate

Federal Reserve Vice Chair Philip Jefferson:

• need to look at the totality of the net effect of the Trump administration’s influence on policy goals
• happy to keep policy at the current level of restrictiveness until there is a better sense of the totality of impacts
• even if the rate was 100bp lower it’d still be restrictive
• this allows us to be patient and wait to see the net effect of policy changes

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What is he going on about?

He argues that he wants to hold rates restrictive until the ramifications of new policies become clear.
Fair point.

But then he says even 100bp lower is restrictive.

So, I’m thinking, why not cut by 100bp, if that’s still restrictive? That would seem to be a win for everyone.

Or, lets not get to excited, how about meet in the middle, and cut by 50? (Art of the Deal, right there.)

This article was written by Eamonn Sheridan at www.forexlive.com.